Stories I’d like to see

Drachma redux, Hoffa’s killers, besting JPMorgan

In his weekly “Stories I’d Like to See” column, journalist and entrepreneur Steven Brill spotlights topics that, in his opinion, have received insufficient media attention. This article was originally published on Reuters.com.

1. Printing drachmas?

What actually will happen if Greece leaves the euro zone and goes back to its own currency? How would that work? Is there a printing press somewhere busily churning out drachmas just in case? Or did they keep the old ones in storage? How will Greeks get new drachmas? Will they exchange their euros for them? How will the exchange rates be determined? How will all the software for cash registers and credit card and e-commerce transactions be reprogrammed?

2. Searching for Jimmy Hoffa’s assassins:

We’re approaching, in two months, the 37th anniversary of the disappearance of Teamsters Union leader Jimmy Hoffa. I wrote a book about the union three years after his disappearance that pinpointed how he was murdered and who did it. Although the FBI spelled out in an internal memo and in various affidavits seeking search warrants pretty much the same scenario and suspects that I reported, the feds were never able to make a case because no one would talk and Hoffa’s body was never found. (It was probably incinerated in a mob-connected sanitation plant near Detroit.)

However, the case is still officially open. In fact, I’m told there is at least one FBI agent still assigned to it. With almost all of the people involved in taking out Hoffa now dead, what does that agent do all day? A great story commemorating the anniversary would not only spend a few days with that agent but also check in on Hoffa’s son, James, who is now the Teamsters president. Portrayed in my book as a completely clean lawyer who did some union-related legal work, James took over his father’s old job in 1999. When I spent time with him in the years just after his father’s murder he was seethingly bitter about how the mob element that controlled the union in partnership with his father had turned on the elder Hoffa. But he was also understandably afraid to say much about it publicly. What’s he got to say all these years later?

3. Are gift cards the new currency?

Last month’s mammoth takedown in The New York Times of Wal-Mart’s alleged cover-up of allegations of corporate bribery in Mexico reported that one alleged method of spreading payments to local Mexican officials was by giving them Wal-Mart gift cards. That got me wondering how that kind of accounting was handled.

It’s one thing to disguise a bribe by recording it as a fee paid to a lawyer or other middleman, who passes it on to the corrupt official. But how would depleting the gift card inventory that way be explained? Or are controls on gift cards so lax that this can be done routinely? What about gift cards at other large retailers? Do they hand them out to “friends” this way? Again, this seems like an easier way to dispense illicit corporate funds than cutting a check or creating a cash stash.

And while we’re on the subject of gift cards and accounting, with the cards now proliferating so widely I’d love to see a story on how companies account for them when it comes to reporting profit and loss. If I give a corporation $50, the company counts that revenue against the cost of what I just bought for that $50 But if I buy a gift card, it has no costs to count it against, which should mean that until someone redeems my gift card by taking $50 worth of merchandise, under basic accounting theory the company should not record the revenue because it hasn’t earned it by supplying any merchandise. Is that the way it works uniformly? And if so, what happens if my giftee never redeems the card or never redeems it fully? When can the money paid for unredeemed cards be counted as revenue?

How much of a profit center have such unredeemed gift cards become? And what are the regulations governing how long someone has to redeem the cards?

4. If JPMorgan lost, who won?

Aside from this article in Reuters, which pieced together part of the mystery, as far as I can tell, with all that’s been reported about JPMorgan’s trading loss of more than $2 billion, there’s one part of the story that’s not been fully covered: If one party loses billions in a trade, another party - or, as seems to be the case here, many parties have to have made those billions.

So far, the most public reference to that side of the story I’ve seen is an offhand comment made by a politician who’s always looking at things from a business angle. According to the Wall Street Journal, when he was asked last week about the JPMorgan fiasco, Mitt Romney told a radio interviewer: “That’s the way America works. Some people experienced a loss in this case because of a bad decision. By the way, there was someone who made a gain ” To be sure, if the Reuters piece is correct, this seems to be the way the world, not America, works: Those on the other side of the trade so far seem to include London-based hedge funds.

So who are the lucky winners? Does JPMorgan even know? What about the fact that the Reuters piece notes that at least two of the winners used to be traders at JPMorgan? And what more can we find out about the drama unfolding right now as these traders decide whether to push for more winnings against JPMorgan or take their money off the table? How does this poker game work?

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Steven Brill , the author of Class Warfare: Inside the Fight To Fix America’s Schools, has written for magazines including New York, The New Yorker, Time, Harper's, and The New York Times Magazine. He founded and ran Court TV, The American Lawyer magazine, ten regional legal newspapers, and Brill's Content magazine. He also teaches journalism at Yale, where he founded the Yale Journalism Initiative.Tags: gift cards, greece, JPMorgan, Wal-Mart

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